The government budget constraint says that ________
A) the difference between spending and revenues must equal the amount of new bond issues
B) increases in spending must be matched by increases in revenue
C) interest on government debt must be paid before tax revenues are spent on goods and services or disbursed as transfer payments
D) state and local governments, in aggregate, cannot spend more than the federal government
A
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Referring to Table 12.2, if the nominal interest rate is 9.5 percent and there is no inflation, which investments will be undertaken?
A) E and D B) E C) C, D, E D) none of the above
Increasing the income tax rate ________ the ________
A) does not change; supply of labor B) decreases; supply of labor C) increases; supply of labor D) decreases; demand for labor E) increases; demand for labor